Impact of Medical–Pharmaceutical Separation Reform on Hospitalization Expenditure in Tertiary Public Hospitals: Difference-in-Difference Analysis Based on Panel Data from Beijing

Abstract

Purpose

The medical–pharmaceutical separation (MPS) reform is a healthcare reform that focuses on reducing the proportion of drug expenditure. This study aims to analyze the impact of the MPS reform on hospitalization expenditure and its structure in tertiary public hospitals.

Methods

Using propensity score matching and multi-period difference-in-difference methods to analyze the impact of the MPS reform on hospitalization expenditure and its structure, a difference-in-difference-in-difference model was established to analyze the heterogeneity of whether the tertiary public hospital was a diagnosis-related-group (DRG) payment hospital. Of 22 municipal public hospitals offering tertiary care in Beijing, monthly panel data of 18 hospitals from July 2011 to March 2017, totaling 1242 items, were included in this study.

Results

After the MPS reform, the average drug expenditure, average Western drug expenditure, and average Chinese drug expenditures per hospitalization decreased by 24.5%, 24.6%, and 24.1%, respectively (P < 0.001). The proportions of drug expenditure decreased by 4.5% (P < 0.001), and the proportion of medical consumables expenditure increased significantly by 2.7% (P < 0.001).

Conclusion

The MPS reform may significantly optimize the hospitalization expenditure structure and control irrational increases in expenditure. DRG payment can control the tendency to increase the proportions of medical consumables expenditure after the reform and optimize the effect of the reform. There is a need to strengthen the management of medical consumables in the future, promote the MPS reform and DRG payment linkage, and improve supporting measures to ensure the long-term effect of the reform.

Keywords:

• diagnosis-related-group
• provider payment reforms
• healthcare expenditure
• propensity-score-matching
• difference-in-difference-in-difference
• China

Abbreviations

MPS, medical–pharmaceutical separation; DRG, diagnosis-related-group; PSM, propensity score matching; DID, difference-in-difference; DDD, difference-in-difference-in-difference; CMI, case mix index; CEI, charge consumption index.

Data Sharing Statement

The data were collected from the Beijing Hospital Management Centre and Beijing Medical Insurance Bureau. The datasets can be accessed and used for academic research with the permission of the human resources management office in Beijing Hospital Management Centre and the office in Beijing Medical Insurance Bureau. The datasets are not publicly available.

Ethical Approval

This study was reviewed by the Medical Ethics Committee of Beijing Cancer Hospital and granted exemption from ethical review. In accordance with the guidelines of relevant documents “Measures for Ethical Review Involving Human Beings and Biomedical Research” (the National Health and Family Planning Commission of the People’s Republic of China Decree No. 11), Chapter 1, Article 3, this study does not involve subject protection and ethical approval was not required.

Acknowledgments

The authors would like to thank Enago (https://orders.enago.cn/cn/Inquiry/1602) for English language editing. In addition, we would like to extend our gratitude to reviewers and editors for their comments to help improve our manuscript.

Author Contributions

All authors made a significant contribution to the work reported, whether that is in the conception, study design, execution, acquisition of data, analysis and interpretation, or in all these areas; took part in drafting, revising or critically reviewing the article; gave final approval of the version to be published; have agreed on the journal to which the article has been submitted; and agree to be accountable for all aspects of the work.

Disclosure

The authors report no conflicts of interest in this work.

Additional information

Funding

This work was supported by the National Social Science Foundation of China (Grant number: 23BGL253, 22CGL052), the Chinese Academy of Social Sciences Youth Humanities and Social Sciences Research Center Social Research Project (Grant number:2024QNZX028), and the Chinese Academy of Social Sciences “Qingqi Program” Project (Grant number: 2024QQJH010).